We believe investors should focus on three themes: 1) the shift in the U.S. from Prime acquisition to engagement via new products and services; 2) the jump in Prime international and the lifetime value potential it brings; and 3) continued monetization of AWS.

We believe that 2017 will go down as a pivotal year for Amazon Prime memberships, where the company's focus in North America shifted from Prime enrollment to engagement and where many international markets are seeing a Prime recruitment ramp similar to the U.S. in 2012-13. This is evident in the 59% increase in subscription services revenue, with Prime Day helping to drive U.S. members into new services, and a record number of Prime trials globally. Not surprising, this recruitment and engagement is also helping to drive third-party seller activity, where revenue growth remained robust at 40%. AWS posted healthy currency-neutral revenue growth of 42% and segment margins of 25.5%, which we attribute to the adoption of mission critical services and AWS Marketplace contract term changes.

We're planning a modest increase to our fair value estimate and see shares as undervalued today.